India, China prepare to compete in Africa

India has joined the race with China for Africa’s abundant hydrocarbons and natural resources while offering to empower the 53-nation continent through affordable technologies, the development of human capital and equal partnerships.

Indian officials believe that these measures, along with attractive development funds for Africa, could help New Delhi compete with China and counter the Asian giant’s rising economic clout in the African world.

The first-ever India-Africa summit, which began in New Delhi on Tuesday, confirmed the importance of the continent on India’s foreign-policy radar.

From merely viewing African countries in terms of solidarity with the developing world or supporting them at the Non-Aligned Movement and the Commonwealth, New Delhi has now changed the paradigm and frames the relationship as a “partnership of equals”.

Much of the change has to do with the economy’s burgeoning energy needs, particularly since its major energy projects—a civilian nuclear energy deal with the United States and a $7-billion Iran-Pakistan-India pipeline—are stuck in limbo.

Indian oil majors like ONGC Videsh Limited (OVL) have invested in assets in Sudan, Côte d’Ivoire, Libya, Egypt, Nigeria and Gabon. OVL invested $750-million for a 25% stake in a company in the Upper Nile oilfield in Sudan in 2003.

Private companies like Reliance have also invested in Sudan and East Africa.
India completed a $200-million pipeline project in Sudan and is negotiating with Chad, Malawi, Niger, Angola and Mauritania.

Meanwhile, China’s trade volumes and presence in the hydrocarbon sector far surpass India’s. The latter’s trade with Africa—which was more than China’s in 1999—is now estimated at $30-billion, half of the trade China has with the continent.

China’s investment figure is about $8-billion, mostly in resource-rich countries such as Sudan, Angola and Congo, nearly four times India’s investments in Africa. China also gives easy loans in exchange for access to oil, copper and manganese.

Worried about its energy security as well as the growing Chinese influence in African nations, India is trying to transform its low-profile engagement into active participation.

But in contrast with China’s purely commerce-driven endeavour in Africa, India says that its approach is based on empowering Africans through capacity building and skills development in projects.

By tapping goodwill through its traditional links with African nations that date back to the British colonial era, India also aims at Africa’s industrial development with partnerships in small and medium enterprises.

“India is helping Africa develop its own infrastructure and in value-addition of its resources. India believes in the philosophy of jointly developing resources to the mutual benefit of both India and Africa,” India’s Junior Foreign Minister Anand Sharma said.

Sharma said Indian enterprises have created employment opportunities for Africans, mentioning that four-fifths of the workforce and executives in such projects are Africans.

“China entered Africa with the policy of resource extraction; they have developed infrastructure but it was mainly to the regime’s demand,” said Ruchita Beri, research fellow in the New Delhi-based Institute of Defence Studies and Analysis.

“Although India cannot compete with the quantity and content of Chinese engagement, the difference is that in the past years India has contributed to skill development and enhancing human resources in Africa,” she said.

But Beri cautioned India to move away from “aid diplomacy”—under which India has pledged $500-million in concessional lines of credit to African countries—saying it no longer interests African nations, which are on the lookout for fresh investments and joint partnerships for economic growth.

Shipra Tripathi, director of the Africa Committee of the Confederation of Indian Industry (CII), said Indian companies are already winning hearts in African countries seeking partnerships to develop their economy.

“They [Indian companies] are not just profit-seekers. They are investing into resources locally, training manpower so they could learn operations first-hand, look at sustaining projects and not merely completing them quickly for short-term gain,” she said.

She said Africa is interested in acquiring “appropriate, adaptable and affordable [so-called ‘triple A’] technologies” as well low-cost medicines from India to check the spread of diseases such as malaria, tuberculosis and HIV/Aids.

The summit, which is a culmination of several levels of dialogue, is already being considered a success—it is hoped it will create an enabling environment for upgrading cooperation in areas of energy and economy.

“The summit should light the path for industry in Africa, which we think is a continent of the future and a continent of light,” Tripathi said.—Sapa-dpa